The next chapter concentrates on one of the main aspects of this design framework — the planning of logistics processes. The key logistics processes are described, and then an approach to process design or redesign is proposed. Some of the main tools and techniques are explained.
Chapter 8 describes the important area of supply chain segmentation. In Chapter 9 the planning of physical distribution activities is considered, including the more traditional pastures of depot location decisions. A discussion on the role of depots and warehouses is followed by a detailed assessment of the different cost relation- ships that are fundamental to the physical distribution planning process.
A planned approach to designing an appropriate strategy is included. Chapter 10 is concerned with the way in which logistics and distribution are organized within the company. The relationship with other corporate functions is considered. The need to develop more process-oriented organizational structures, rather than maintaining the tradi- tional functional perspective, is proposed. The specific role of the logistics and distribution manager is described. Some payment schemes and mechanisms that are common to the industry are outlined.
Chapter 11 is a new inclusion on multichannel fulfilment. This chapter considers the issues related to the distribution of goods that have been sold through a number of different sales channels. It reflects the challenges that arise for distribution and logistics as a consequence of the variety of new and old channels that are now available.
The final chapter in this part of the book, Chapter 12, is concerned with manufacturing and materials management. Manufacturing is rarely a function that is found directly within the auspices of logistics. It is, however, a major factor within the broader context of the supply chain and is a principal interface with logistics.
Thus, some of the key elements in manufacturing and materials management are introduced in this chapter. Part 3 concentrates on those issues that are involved with procurement and inventory decisions.
Chapter 13 covers basic inventory planning and management. The reasons for holding stock are considered, and the different types of stock are outlined. The implications of stockholding on other logistics functions are described, and the use of different inventory replenishment systems is explained. Reorder quantity decisions are discussed, and the EOQ method is outlined. Simple demand forecasting is introduced.
The important relationship of inventory and time is explored. Key advances in inventory planning for manufacturing and for retailing are outlined. The final chapter in this part of the book, Chapter 15, covers some of the main principles concerned with procurement.
In Part 4, consideration is given to those factors that are concerned with warehousing and storage. Chapter 16 introduces the main warehousing principles and also provides an outline of the main warehouse operations. Palletized storage and handling systems are considered in Chapter Included here are the principles of storage as well as descriptions of the various types of storage systems and storage equipment that are available.
Chapter 18 concentrates on the many different non-palletized handling systems and equipment types that are used. In Chapter 19, order picking and replenishment are reviewed in some detail.
The main principles of order picking are explained, and the various order picking methods are outlined. In Chapter 20 another key warehouse function is considered: receiving and dispatch. The major factors are outlined within the context of overall warehouse operations. An approach to warehouse and depot design and layout is described in Chapter The methods described here are an essential guide to ensuring that a warehouse or depot is designed to be effective in the light of the logistics operation as a whole.
Part 5 concentrates on those areas of logistics and distribution specifically related to freight transport. Chapter 23 considers international logistics and the choice of transport mode. Initially, the relative importance of the different modes is reviewed. A simple approach for modal choice selection is then proposed, including operational factors, transport mode characteristics, consignment factors and cost and service requirements.
Finally, there is a brief review of some key aspects of international trade. Chapters 24, 25 and 26 provide an overview and description of the major modes of international transport: maritime, air and rail. For each of these, the basic infrastructure of the industry is reviewed, together with a variety of other aspects such as equipment, safety, pricing, security and documentation.
In Chapter 26, the use of intermodal transport is also discussed. The remaining chapters in this part of the book are concerned with aspects of road freight transport.
Vehicle selection factors are described in Chapter Included here are the main types of vehicle and vehicle body, different operational aspects, and load types and characteristics. In Chapter 28, vehicle and fleet costing is considered.
The main transport costs are indicated, and whole life costing is described. The final chapter of Part 5 of the book, Chapter 29, concentrates on the planning and resourcing of road freight transport operations. This includes the need for planning, and the important use of vehicle routing and scheduling to aid this process. The main objectives of routing and scheduling are indicated, and the different types of problem are described. Examples of both manual and computer routing and scheduling methods are outlined.
The final part of the book, Part 6, considers a number of aspects related to the operational management of logistics and distribution. This begins with Chapter 30, where cost and performance monitoring of logistics and distribution operations is discussed.
A description of a formal approach to logistics monitoring and control is outlined. Several different means of measurement are introduced, and a number of areas of best practice are considered. Examples of detailed key performance and cost indicators are given. Chapter 31 describes the use of benchmarking as a major technique for identifying best practice in logistics. As well as an overview of benchmarking procedures, a detailed approach to benchmarking distribution activities is outlined.
Chapter 32 considers the different information systems that can be used in the supply chain. There have been, and continue to be, many major advances in informa- tion communication and technology. This chapter serves to provide an overview of some of those elements that are particularly important to logistics and the main components of distribution. The question of whether or not to outsource logistics was introduced in Chapter 4.
In Chapter 33 the various operations and services that are offered by third-party companies are reviewed and the main advantages and disadvantages of outsourcing are discussed. The actual process of selection is described in Chapter 34, including a step-by-step guide. In Chapter 35 the importance of managing an outsourced contract is explained and the key factors required in managing a successful relationship are examined.
Chapter 36 covers a very important area of responsibility in logistics — that of security and safety. Many aspects that are relevant to logistics planning and operations are discussed. Another important consideration is the impact of logistics operations on the environment as well as the environmental regulations that impose on logistics operations.
These elements are reviewed in Chapter The final chapter, Chapter 38, is a new addition that looks at humanitarian logistics. The chapter provides an overview of humanitarian logistics and highlights some of the main differences between this field and commercial logistics. Once again, we hope that this new edition of The Handbook of Logistics and Distribution Management will continue to serve as a useful aid to understanding this wide-ranging and increasingly important business area.
Most, but not all, of these appear in the text. Readers may consult this section quite independently. The main reason that this recognition has only been relatively recent is the nature of logistics itself. It is a func- tion made up of many sub-functions and many subsystems, each of which has been, and may still be, treated as a distinct management operation. Both the academic and the business world now accept that there is a need to adopt a more holistic view of these different operations in order to take into account how they interrelate and interact with one another.
The appreciation of the scope and importance of logistics and the supply chain has led to a more scientific approach being adopted towards the subject. This approach has been aimed at the overall concept of the logistics function as a whole but, importantly, includes the interrelationship of the individual subsystems as well. Much of this approach has addressed the need for, and means of, planning logistics and the supply chain, but has necessarily considered some of the major operational issues.
This first chapter of the book provides an introduction to some of the very basic aspects of distribution, logistics and the supply chain. Initially there is a review of the scope and definition of distribution, logistics and the supply chain. Next is a discussion of the key elements that are fundamental to the logistic function. A description of the historical growth of distribution and logistics is followed by an assessment of its importance throughout the world.
Finally, a typical distribution and logistics structure is described and discussed. Every industry has its own characteristics, and for each company in that industry there can be major variations in strategy, size, range of product, market coverage, etc. Logistics is, therefore, a diverse and dynamic function that has to be flexible and has to change according to the various constraints and demands imposed upon it and with respect to the environment in which it works.
Thus, these many different terms are used, often interchangeably, in literature and in the business world. One quite widely respected definition also helps to describe one of the key relationships. This includes the supply of raw materials and components as well as the delivery of products to the final customer. It should also be noted that logistics and the supply chain are concerned not only with physical flows and storage from raw material through to the final distribution of the finished product, but also with information flows and storage.
This shows the key components, the major flows and some of the different logistics terminology importance of information as well as physical flows and storage. An additional and very rele- vant factor is that of reverse logistics — the flow of used products and returnable packaging back through the system.
Figure 1. The question of what is the most appropriate definition of logistics and its associated name- sakes is always an interesting one. There are a multitude of definitions to be found in textbooks and on the internet. A selected few are: Logistics is Hesket, Glaskowsky and Ivie, Logistics is the management of the flow of goods and services between the point of origin and the point of consumption in order to meet the requirements of customers. Chartered Institute of Logistics and Transport UK , It is interesting to detect the different biases — military, economic, academic, etc.
An appropri- ate modern definition that applies to most industry might be that logistics concerns the efficient transfer of goods from the source of supply through the place of manufacture to the point of consumption in a cost-effective way while providing an acceptable service to the customer. This focus on cost-effectiveness and customer service will be a point of emphasis throughout this book. A more critical consideration of the difference between logistics and the supply chain is given at the end of Chapter 2.
It is developed using some of the ideas that are discussed in that chapter. For most organizations it is possible to draw up a familiar list of key areas representing the major components of distribution and logistics. These will include transport, warehous- ing, inventory, packaging and information. Some typical examples are given in Figure 1. A number of questions need to be asked and decisions made.
The different ways of answering these questions and making these decisions will be addressed in the chapters of this book as consideration is given to the planning and operation of the logistics and supply chain function. In addition, the total system interrelationships and the constraints of appropriate costs and service levels will be discussed. Historical perspective The elements of logistics and the supply chain have, of course, always been fundamental to the manufacturing, storage and movement of goods and products.
It is only relatively recently, however, that they have come to be recognized as vital functions within the business and economic environment. The role of logistics has developed such that it now plays a major part in the success of many different operations and organizations. In essence, the underlying concepts and rationale for logistics are not new. They have evolved through several stages of development, but still use the basic ideas such as trade-off analysis, value chains and systems theory together with their associated techniques.
There have been several distinct stages in the development of distribution and logistics. Manufacturers manufactured, retailers retailed, and in some way or other the goods reached the shops. There was little positive control and no real liaison between the various distribution-related functions. This consisted of the recognition that there was a series of interrelated physical activities such as transport, storage, materials handling and packaging that could be linked together and managed more effectively.
In particular, there was recognition of a relationship between the various functions, which enabled a systems approach and total cost perspective to be used. Under the auspices of a physical distribution manager, a number of distribution trade-offs could be planned and managed to provide both improved service and reduced cost. One major change was the recognition by some companies of the need to include distribution in the functional management structure of an organization.
The decade also saw a change in the structure and control of the distribution chain. There was a decline in the power of the manufacturers and suppliers, and a marked increase in that of the major retailers. The larger retail chains developed their own distribution structures, based initially on the concept of regional or local distribution depots to supply their stores.
With this professionalism came a move towards longer-term planning and attempts to identify and pursue cost-saving measures. These measures included centralized distribution, severe reductions in stockholding and the use of the computer to provide improved information and control. The growth of the third-party distribution service industry was also of major significance, with these companies spearheading developments in information and equip- ment technology.
The concept of and need for integrated logistics systems were recognized by forward-looking companies that participated in distribution activities. Late s and early s In the late s and early s, advances in information technology enabled organizations to broaden their perspectives in terms of the functions that could be integrated. In short, this covered the combining of materials management the inbound side with physical distribution the outbound side.
Once again this led to additional opportunities to improve customer service and reduce the associated costs. One major emphasis made during this period was that informational aspects were as important as physical aspects in securing an effective logistics strategy.
This became known as supply chain management see Figure 1. Thus, for example, manufacturers and retailers should act together in partner- ship to help create a logistics pipeline that enables an efficient and effective flow of the right products through to the final customer. These partnerships or alliances should also include other intermediaries within the supply chain, such as third-party contractors. This led to the develop- ment of many new ideas for improvement, specifically recognized in the redefinition of business goals and the re-engineering of entire systems.
Logistics and the supply chain finally became recognized as an area that was key to overall business success. Indeed, for many organizations, changes in logistics have provided the catalyst for major enhancements to their business. Thus, the role and importance of logistics continued to be recognized as a key enabler for business improvement. Importance of logistics and distribution It is useful, at this point, to consider logistics in the context of business and the economy as a whole.
Importance in the economy Logistics is an important activity making extensive use of the human and material resources that affect a national economy. Due to the difficulty of data collection, only a limited number of studies have been undertaken to try to estimate and compare the extent of the impact of logistics on the economy. Indeed, in recent years it has been very difficult to locate a study that provides this information in any detail.
A recent study by Capgemini Consulting found that total logistics expenditure as a percentage of sales revenues was the same for the three major trading regions of North America, Europe and Asia-Pacific — at 11 per cent; for Latin America it was 14 per cent. Another study, undertaken by Armstrong and Associates , was able to present similar data at a country level, which indicated that for major economies logistics represented somewhere between 8 and 21 per cent of the gross domestic product GDP of that country.
This information is summarized in Figure 1. For developing countries this range was higher at around 12 per cent to 21 per cent — with India at about 17 per cent and China at 21 per cent.
These numbers represent some very substantial costs, and serve to illustrate how important it is to understand the nature of logistics costs and to identify means of keeping these costs to a minimum.
Countries with the lowest costs are generally those where the importance of logistics was recognized relatively early and where there has been time to create more efficient systems. It is to be expected that the logistics costs of developing countries will decrease over the next few years as these countries are able to benefit from improvements.
About 25 years ago, if the same statistics had been available, these percentage elements would undoubtedly have been a lot higher in all of these countries. In the UK, records go back for about 30 years, and logistics costs were then around the 18 to 20 per cent mark. However, since percentage costs have marginally increased. This was due to the global financial crisis and the increase in the cost of fuel.
A useful discussion paper presented at the International Transport Forum provides some specific figures for the measurement of national level logistics cost and performance for certain individual countries and can be used for further information. Importance of key components The breakdown of the costs of the different elements within logistics has been addressed in various surveys. The survey also produced a pan-European cost breakdown.
In both studies the transport cost element of distribution was the major constituent part, often due to high fuel costs. US transport costs are especially affected by the long distances travelled, so the transport cost element is markedly higher there than it is in Europe.
Importance in industry The statistics described in the previous section are useful to provide a broad perspective on the importance of the relative logistics components. When looking at industry and company level, however, it is essential to be aware that the above costs are average figures taken across a number of companies.
The relative make-up of these costs can vary quite significantly between different industries. Listed in Table 1. There are some quite major variations amongst the results from the various companies and there can be a number of reasons for this. One of the main reasons for these cost differences is that logistics structures can and do differ quite dramatically between one company and another, and one industry and another.
Channels can be short ie very direct or long ie have many intermediate stocking points. Supply chains may be operated by different players: manufacturers, retailers, specialist third-party distribution companies, or indeed by a mixture of these.
For example, cement is a low-cost product as well as being a very bulky one! Spirits whisky, gin, etc are very high-value products, so the relative logistics costs appear very low. This is principally because large companies can benefit from economies of scale. This is because the high value of their goods tends to distort downwards the importance of the respective logistics costs. These and other associated aspects are discussed in subsequent chapters. A series of studies undertaken by Datamonitor indicate that the global logistics market including all in-house and outsourced logistics operations is dominated by retail logistics services This applies globally and is reflected in all key markets see Table 1.
The retail sector has been at the forefront of some of the most advanced and innovative devel- opments in logistics and supply chain thinking. Table 1. The fundamental characteristics of a physical distribution structure, illustrated in the first part of Figure 1. This flow is usually some form of transportation of the product. The stationary periods are usually for storage or to allow some change to the product to take place — manufacture, assembly, packing, break-bulk, etc.
This simple physical flow consists of the different types of transport primary, local delivery, etc and stationary functions production, finished goods inventory, etc. The importance of this distribution or logistical cost to the final cost of the product has already been highlighted.
As has been noted, it can vary according to the sophistication of the distribution system used and the intrinsic value of the product itself. This is a more positive view of logistics and is a useful way of assessing the real contribution and importance of logistics and distribution services. The added value element varies considerably from one product to another.
Summary In this initial chapter, a number of concepts and ideas have been introduced. These will be expanded in subsequent chapters of the book. The rather confusing number of associated names and different definitions was indicated, and a few of the very many definitions were considered. The recent history of distribution, logistics and the supply chain was outlined, and a series of statistics served to illustrate how important logistics and the supply chain are to the economy in general and to individual companies.
The breakdown between the constituent parts of distribution and logistics was given. The basic structure of the supply chain was described, and the concepts of material and information flow and the added value of logistics were introduced. Thermal Engineering free Download. Thermodynamics TD Textbook free Download. Transportation Engineering free Download — TE. Engineering Textbooks Free Download Pdf. We are looking forward to provide the remaining Study Materials which we have not included in Our Data Bases yet.
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Dekker in New York. Written in English — pages. Subjects Planning , Electric power distribution. Power distribution planning reference book , M. Libraries near you: WorldCat. Power distribution planning reference book First published in Subjects Planning , Electric power distribution. Edition Notes Includes bibliographical references and index.
Series Power engineering ;, Classifications Dewey Decimal Class W55 , TK The Physical Object Pagination xix, p. Community Reviews 0 Feedback? Lists containing this Book. Loading Related Books.
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